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What Today’s Rainmakers Do Differently

Here is an excerpt from an article written by Ted McKen, Matthew Dixon, Rory Channer, and Karen Freeman for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit:  Tobias Habermann         

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Business development at professional services firms is outdated. Here’s what works now.

The self-evaluation memo is an annual ritual at global law firm Baker McKenzie. At most firms, year-end self-appraisals consist of fee earners’ perspectives on their own performance, but Baker McKenzie does things differently. It asks its partners to not just report on their own accomplishments but also point to specific instances in which they’ve successfully collaborated with colleagues—by, for example, introducing other partners with different areas of expertise to their clients. The firm expects its partners to expose clients to its broad array of services and to build new relationships—and in the process increase revenue. “Collaboration is crucial for Baker McKenzie,” says Colin Murray, the firm’s North America chief executive officer.

Because the partners know they will be asked to provide examples of collaboration in their year-end memos, they have an incentive to work with other lawyers across the firm throughout the year. Since switching to a collaborative approach six years ago, Baker North America has increased its revenue more than 40%.

Much research has been conducted to determine what makes top salespeople at B2B companies perform better than their peers. (See, for example, “The End of Solution Sales,” HBR, July–August 2012.) But little has been done on professional services firms, which have a unique go-to-market model in the B2B landscape. At most B2B companies, demand generation, sales, product delivery, customer success, and account management are discrete functions and tasks. But at professional services firms, partners are responsible for doing all of them. While most professional services firms have business-development support teams, the partners are “doer-sellers” and own the entire business-development and service-delivery life cycle. As “rainmakers,” they must build awareness of their expertise in the market to generate demand, identify and close new client business, deliver the work, and then renew and expand the relationship over time.

For partners, becoming an effective business developer has long revolved around a central tenet: If you do good work and develop a strong relationship with your clients, they will come back to you the next time a need arises. But there is a growing problem with this belief—one that is rarely discussed openly. Clients—even long-standing ones for whom firms have delivered unquestioned value—are much less loyal than they once were. A survey we conducted of roughly 100 C-level executives revealed that as recently as five years ago, 76% of buyers preferred to buy again from partners or firms they had used in the past. Today, that figure is down to 53%—and over the next five years, it is expected to drop to 37%. So-called soft-spend categories such as management consulting, legal services, accounting, investment banking, PR, and executive search—once shielded by senior executives from formal procurement scrutiny—are now much more likely to be vetted as carefully as other spend categories. The result is that buyers are no longer defaulting to established relationships with premium-priced providers and now consider a range of alternative service providers, midtier players, and boutique firms. For their part, professional services firms report an increase in RFP-driven purchasing, a slowdown in repeat business from key clients, and pressure on rates, billable hours, and advisory fees. In this environment, the widening gap between high performers’ and core performers’ ability to bring in business is troubling and has increased the urgency to understand what the best rainmakers do differently.

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Here is a direct link to the complete article

Matthew Dixon is a founding partner of DCM Insights, a company that helps professional services firms improve business development. He is a coauthor of The Challenger Sale and The JOLT Effect.
Ted McKenna is a founding partner of DCM Insights and a coauthor of The JOLT Effect. He was previously a global knowledge leader at Russell Reynolds Associates.
Rory Channer is a founding partner at DCM Insights and was previously chief business development officer at McDermott Will & Emery.
Karen Freeman is a partner at DCM Insights and was previously a senior manager of learning at McKinsey & Company.


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